Critical Analysis: XBiotech (NASDAQ:XBIT) vs. Cue Biopharma (NASDAQ:CUE)

Cue Biopharma (NASDAQ:CUE – Get Rating) and XBiotech (NASDAQ:XBIT – Get Rating) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Cue Biopharma and XBiotech, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cue Biopharma	0	0	3	0	3.00
XBiotech	0	0	0	0	N/A

Cue Biopharma presently has a consensus price target of $8.33, indicating a potential upside of 114.78%. Given Cue Biopharma’s higher possible upside, equities analysts plainly believe Cue Biopharma is more favorable than XBiotech.

Risk and Volatility

Cue Biopharma has a beta of 2.02, suggesting that its stock price is 102% more volatile than the S&P 500. Comparatively, XBiotech has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500.

Profitability

This table compares Cue Biopharma and XBiotech’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cue Biopharma	-12,005.79%	-89.72%	-62.11%
XBiotech	-820.45%	-12.81%	-12.46%

Earnings and Valuation

This table compares Cue Biopharma and XBiotech’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cue Biopharma	$1.25 million	134.03	-$53.01 million	($1.34)	-2.90
XBiotech	$3.51 million	44.05	-$32.90 million	($1.19)	-4.27

XBiotech has higher revenue and earnings than Cue Biopharma. XBiotech is trading at a lower price-to-earnings ratio than Cue Biopharma, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

31.9% of Cue Biopharma shares are held by institutional investors. Comparatively, 10.1% of XBiotech shares are held by institutional investors. 12.1% of Cue Biopharma shares are held by company insiders. Comparatively, 27.8% of XBiotech shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

XBiotech beats Cue Biopharma on 7 of the 13 factors compared between the two stocks.

About Cue Biopharma

(Get Rating)

Cue Biopharma, Inc. is a clinical-stage biopharmaceutical company, which engages in the development of a novel and proprietary class of biologic drugs for the selective modulation of the human immune system to treat a broad range of cancers and autoimmune disorders. Its pipeline includes Immuno-oncology, CUE-100 framework, CUE-200 framework, and autoimmune disease. The company was founded by Ronald D. Seidel III, Steven Almo, and Rodolfo Chaparro on December 31, 2014 and is headquartered in Boston, MA.

About XBiotech

(Get Rating)

XBiotech, Inc. is a biopharmaceutical company, which engages in the development and commercialization of therapeutic antibodies. Its product pipeline includes oncology, infectious diseases, dermatology and inflammatory disorders. The company was founded by John Simard on March 22, 2005 and is headquartered in Austin, TX.